Gordon Food Service Market Updates - Seafood | Finfish - View PDF

Gordon Food Service Market Updates

Seafood | Finfish
Cod, Alaskan 1x:

The supply ofthe big stocks of wild whitefishare set to remain stable for 2020, lifting
by less than 1% according to the forecast from the Ground fish Forum in October
2019. For Pacific cod the forum forecast has the total supply at 365,000 t in 2020
down from 387,000t. Note the Gulf of Alaska is completely closed in Federal waters
for this season but the Bering Sea and the Aleutian Islands are still active fisheries .
Overall this hasdriven a decline in Canadian and US landings from 185,000t to
158,000t as well. Currently Limson has plenty of supply in the 8/16 oz size.

Cod, Atlantic 1x:

For Russian and Norwegian CodPer Undercurrent News: The InternationalCouncil
for exploration of the Sea (ICES) has recommended that the cod catches in the
Berents Seas are set at 885,600 MT in 2021.ICES advised the cod quota in the
Beren's Sea for 2021 be set ata level 28% higher than the levelthat was advised last
June for 2020 of 689, 672, MT . Prices for headed and gutted cod are currently
firming, but this looks to be short lived. Finn Arne Egeness, a seafood analyst
forecasts an 11% increase in global cod supply to 1.27 MMT for 2021. In 2022
Egeness predictedoutput would drop 8% to 1.17MMT. This likely increase in supply
comes as prices have softened in 2020, due to the impact of the Coronavirus
pandemic. Prices are expectedto drop in 2021 and return to pre-corona levels in
2022. Currently prices seem to be more supply driven than demand driven.Landing
prices drive the market and changes in supply will impact retail price rather than
changes in the marketwill impact landing prices.It is also predicted with the
increase in retail due to the pandemic wouldsee fillet production overtake H&G in
2021, which is the first time this has happened. Currently weexpect the price level
to remain stable for the balanceof the year .The 1x frozen Atl.cod loins fromCanada
are now being offered fromthe new 2020 season. Costs have been confirmed to be
close to the same as last season.Canadian Cod is harvested in three general areas

in northeast Canada that impact our supply.2J 3KL (Northeast Coast).2020 total
removals were recentlyannounced at 12,350mt - same level as in 2019. However
only 10,000mt was caught in 2019 which effectively means the fishermenhave
access to an additional 2,350mt in 2020.3Ps (Southcoast).2020 TAC was cut 55%
from 2019. Limson'sprocessorleft 1,350mt of Canadian* fish in the water last year
so the effective cut is more like 30% for Canada.* the cod quota in this area is
shared between Canada (84.4%) and France (15.6%).4RS 3Pn (West Coast)2020
TAC is 1,000mt - same level as 2019.

Cod, Atlantic 2x:

Pricing has started to rise as orders for the holidays are being placed which is
causing packers to negotiating for raw material. Inventory levels remain healthy.

Cod, Pacific 2x:

Pricing has started to rise as orders for the holidays are being placed which is
causing packers to negotiating for raw material. Have seen some shipping delays on
open orders due to pandemic restrictions.

Pollock, Atlantic 1x:

The overall Pollock supply for 2020 is expected to remain relatively stable . The
forecast at the ground fishforum for the US supply of Alaskan pollock for 2020 is
1.528 million metric tons, down from 1.552 m t in 2019. As the B seasonresumed at
theend of June,first reports werethatthe fish weresmaller only producing2-4 oz
sizedfillets. Reports as of late are now sayingthe opposite where they expectto have
fewer ofthe 2/4 IQF fillets for the fall and intothe 2021 A season. For now Limson
has product and does not expect any interruption in supply. Recently in
Undercurrent News: Lower production of PBO comes as somesources feel
pricesmight comeunder pressure this fall due to high levels of doublefrozen blocks
in China and the EU. The dive in FS demand due to COVID 19 has created high inv
levels , meaning the gap for single frozen fillets is widening fromthat of the double
frozen. Time will tell if this gap closes as we progress into late fall. Recent reports
fromthe NFI whitefish seminar stated that the B season was down 127.000 MT
from2019 due to Covid issues as they were tryingto keep the virus our of vessels
and plants.Over the last 2-3 years the B seasonhas had great fishing conditions. For
2020 there was a change in fishing patterns and a younger fish class was noted ,
yielding smaller fish of morevariationinsizethat resultedin a lower yield. The fleet

has had to travel farther out to find the fish resulting in more days at seaand they
have not schooled upthis seasonmaking them much harder to catch. As a result
production had decreased and they are behind overall. As the season wrappedup at
midnight Oct 31 there were fish left in the water. Oursupplier couldnot achieveall of
their catchquotaand left over 6.Million LBS in the water as they struggled with poor
fishing and smaller sizes. However please note.... they do have Limson / GFS
covered for product thought Lent and well into the Alaskan A seasonfor 2021.

Pollock, Pacific 2x:

According to Undercurrentnews and a recent Pollock Against thePandemic
Webinar... Theyhave reported difficulties in shipping Russian pollock raw materials
intothe key China processing hub of Qingdao which means companies there are
gettingreally short ahead of the ChineseNew Year period. The municipal
government has resolved to test all frozen seafood imports after claiming
coronavirus can survive and transfer in the cold chain. As a result they feel the
Chinese are now in trouble becausethey haven'tcovered themselves upto Chinese
New Year so they need to fill up theirplants wiht raw material , making supply really
tight. For now prices are on an increaseand there is uncertainty as to what the 2021
A season will bring. This will depend on how the season starts, the sizes of the fish
and how much goes to block or H&G. Note Limson has covered their supply
throughthe Chinese New Year,.

Haddock:

Per Undercurrent News: For haddock ICES is advising the TAC be lifted 8% for
2021 to 232,537 MT relative to the advise of 215,000 MT for 2020. Norway and
Russia followed Ices advisefor it's 2020 quota setting it at 215,000MT.Plants
overseas are currently looking to negotiate on prices as they look to get product
moving.

Domestic Lake Fish:

As we progressed throughthe summer season the landingsof perch hadbeen
minimal at best. What we have been able to purchaseis being offered out at a
premium currently.Originally there was concernthat this market couldcrash withno
demand but to date the fishingis so poor on this species they cannot catch enough
to makea difference. Costs remain elevated and taking walleye with perch
purchasesis still an issuewhen they are availablefor sale. For now walleye is

available as we move throughthe fall fishery but costs have increased slightly on
the smaller sizes. The availability of smelt is limiteddue to an overall shortage of the
product.The season for smelt was supposed to have been underway but to date
thefish are so small they cannot be eviscerated forsales and any offerings have
been limited sothe volume is not significant enough to supply current demand. We
are hoping to be able to obtain more product if possible but at the moment the
outlook on supply is bleak Prime fishing was missed for white perch due to the virus
causing there to be a shortage of the product. White perch hadbeen offered but in
limited quantities and we are not sureof the overall volume thatwill be available for
the fall, winter for sales New season whitefish is available at a slightly reduced cost.

Euro Lake Fish & Zander:

Limson is covered on all sizes at this time butthere is less
inventoryavailableoverseas on the smaller 20-40 zander as we progress into the fall
and this will come up short in the near future. Costs arestarting to firm as of late on
most sizesfromoverseas partlydue to the exchange. Euro perch has increased
recently due to the demand and lack ofdomestic perch forFood Service sales. For
latesummer, fall orders, we didexpect a softening oncost purely due to the
currentexchange but that was short lived as of late with the dollar adjusting and
increasing cost of goods. Note this is a lower cost option to the domestic product
and eats comparatively.

Mahi Mahi:

Costs remain stable for an activedemand in Food Service as of late.Note we have
4,6 and 8 oz portionsthat are vacuum packed and can be a great option for retail
applications if sold as eaches. Per Urner Barry's Quarterly Mahi Report:The
new frozen mahi fishing season (2020-2021) in Central and South America (C&SA) is
underway. Importers are anxiously awaiting news from Peru and Ecuador, the two
largest producers of mahi, regarding water temperature, catch size, and prices paid
to fishermen. Typically, importers look to secure product by the end of November/
early December, with imports arriving in Q1 of the following year. Looking at the
just concluded 2019-2020 season (Oct. 2019-Sept. 2020), total frozen imports
registered 35 million pounds, a 35% increase over the previous season. Its
important to remember that we were coming off a record low volume 2018-2019
season which registered a total 26 million pounds, the lowest import volume
recorded in over 5 years. Imports per season (19-20) from C&SA and Asia recorded
24.1 and 10.2 million pounds, respectively. Peru shipped 14.43 million pounds

during the season, .07% more than its 5 -year average, while Ecuador shipped 8.51
million pounds, 25% more compared to its 5-year average. Q3 (July-Sept) total
frozen imports registered 4.8 million pounds, a 9.5% increase over Q3

Frozen Tuna, Swordfish :

As of late costs have remained stable with a slight uptick on demand overall.
Limson has plenty of supply on all offerings fromsteaksto saku to swordfish all in IVP
packaging for retail sales as well.Vietnam The catch is slowing down, and prices
have creeped up 20 to 30 per pound since last month. Prices may continue to firm
up until the catch is back on in, usually, late January/early February. Steak and Loin
inventories seem to betight. Saku, Poke and Ground Tuna (sushi items) availability
is fairly abundant. Indonesia Raw material is low. Prices in Indonesia are also firming
up 15 to 25 per pound. There might be some reliefgoing into November.
SWORDFISHAsia Being a bycatch of Tuna, Sword is the same story as Asian Tuna.
Ecuador Demand is on the rise and supply is just keeping up. The boats are
retooling themselves for the Mahi season, so ifdemand continues at this pace,
availability could become a challenge.. Per Urner Barry:Total Q2 frozen tuna fillet
imports from all countries totaled 16.3 million pounds, a 31.9% decline compared to
this time last year. YTD total imports registered 38 million pounds; a 14.7%
decrease compared to YTD 2019; however, they are trending 42% higher than their
10-year average of 26.7 million pounds. It must be noted that 2019 marked a
record year for total frozen tuna imports, registering 90 million pounds. The two
largest suppliers of frozen tuna in Q2 continued to be Indonesia and Vietnam,
representing 46% and 30%of the frozen market share, respectively. Q2 imports
from Indonesia registered 7.6 million pounds, a 21.8% decline compared to Q2
2019. YTD imports registered 17.3 million pounds, a 9.2% decline YoY. Q2 imports
for Vietnam registered 5.1 million pounds, a 43.5% decline compared to Q2 2019
and YTD imports are 27% lower YoY. As countries-initiated lockdowns to curb the
spread of COVID-19, it has impacted fishing efforts, increased freighter costs, and
disrupted distribution channels. Total fresh imports for Q2 registered 5.8 million
pounds; a 42%decline compared to Q2 2019 and are down 29.6% YTD. Panama was
the top producer of fresh tuna imports in Q2 with 2.2 million pounds; a 100%
increase over Q2 2019 and is trending 208% higher than their 10-year averageYTD,
Panama exported 3.3 million pounds. As of late there has been a lot of noise
surroundingIUU fishing and sustainability issues on tuna mostlyout of the Indian
Ocean. Note however Per Limson's tuna and swordfish supplier;We continue to
make progress in the Vietnam Handline and Swordfish FIPs. (Fishery
Improvement Project)The fishery was declared 100% handline in
December 2019 and the tuna FIP showed significant progress in a 5 year

FIP review at that time. We are fully engaged with Vietnam fisheries
authorities and only have a few more hurdles to leap before entering MSC
Assessment for both tuna and swordfish. On IUU, the vessels now have
100% Vessel Monitoring Devices (VMS) and these are being monitored by
the government. Vessels entering unauthorized areas are being warned or
sanctioned. The government has also issued an Annex to the new fisheries
law (Decree 26) listing all ETP species as banned for capture and
retention. This is new and we will help in the process of helping enforcers
and fishers comply with it as an important part of the work here in
Vietnam in Q4 2019 and 2021. As these issues are important to the overall tuna
fishery no matter what regionthey are alsoimportant to Limson and their customers.

Swai:

Per Undercurrent News: Global pangasius and catfish production is expected tp
fall by 6-7% this year in response to an expected drop in supply from the biggest
producingnation, Vietnam. Globalpangasiussupply is hard to estimate due to China's
lack of public data releases. An overview on the 2020 OUTLOOK is as follows. Total
pangasius exports areexpected to be lower than 2019 around 25% due to COVID-
19.Q2.2020 witnessed the hardest hit in the EU, China, Mexico and other global
markets due to the nationwide lockdowns. China resumed pangasius purchases
after re-opening in late April.Q3.2020, the U.S. and ASEAN showed recovery signs as
export value increased by 47% and19% respectively compared to previous quarter
as these countries lifted the nationwide lockdown orders and stocked up for the
incoming holidays EU was hit by the 2nd wave of COVID-19, thus, demand was
disrupted with a drop of 16%compared to Q2. RawMaterial price has increased by
20-25% since late Q3 due to the surge of global demand whilesupply shrank slightly
due to COVID-19. The price is expected to remain at a sustainable level.

Tilapia:

Generally prices have remained stable most of the year so far. However raw
material pricing/cost was also stable up until about May. Now for the past few
months you have seen an increased competition for raw material. The reasons for
this are due to high demand for many months at retail. Where they prefer 2-5 oz or
3-5 oz traditionally over the larger sizes. Larger sizes tending to be preferred by
restaurants. Focus by some customers and plants on producing 4 oz and below due
to the tariff exclusion.This means that plants are having to pay an ever-increasing
premium to secure enough raw material from the farms to meet orders. Farmers do

not make much profit on smaller sizes. So they prefer to wait until the fish grow
bigger before harvest. Now packers and customers need the farmers to harvest
sooner to get more smaller sizes. Farmers must be incentivized to do that. Packers
are competing for the farm supply. At the same time that would of course mean
theres less available of the larger sizes if farmers are having to harvest sooner.
Overall import volume reports from January through June saw a 25% increase over
2019 with February being high, March very low and then April, May & June back up.
This was mainly driven by the retail demand for frozen seafood. Food service
demand is starting to slowly pick up, though how fast has varied by region of the
country, where in the re-opening phases. Due to the overall demand in retail and
pick up in food service you will see prices start to rise until demand Stabilizes. Per
Undercurrent News: Global production of tilapia is expected to remain stable
despitethe pandemic as a decline in output in China and Indonesia is offset by
growth in Africa, SE Asia and the America's, according to an industry expert.
For2020 global productionrose a notch 0.1% to 6.93 MT for 2020 with production
stableand or growing in 18 our of 21 countrieswith tilapia industries. Growth is
expectedto return to pre pandemic levels in 2021.

Seafood | Shrimp

India and Indonesia have both struggled with the availability of workers and raw
material along with getting Brood Stock as international flights are very limited right
now. In the short term you may see some good pricing in the market as people are
trying to move off old or excess inventory.This will have a larger impact comefall as
this will limit the inventory availability which would cause increasedpricing. Current
shortages in the market are easy peel, cooked shrimp and smaller sizes on raw PD
and PD tail-onas we have seen an uptick in retail and delayed shipments from
overseas.Experts expect to see adrop in overall production output out ofIndia by
30% for2020.Ecuador has been one of the most impacted countries because of
COVID. In 2019 China accounted for 61% of all Ecuador's shrimp exports. With the
current complications between Ecuador and China Ecuador is faced with finding
other outlets tomove inventory with EU and the US being the highest probability.
With India and Indonesia facing potential shortages Ecuador may be able to provide
the solution on certainproducts.

Imported Black Tiger:

Production out of Indonesia has been slow and steady without any major shut
downs. The packers are backed up with excessive orders(for over 6 months in most
cases) and most buyers have experienced extensive shipment delays causing
current shrimp shortages in the US. Raw material prices there are escalating at
much higher pace than in India and packers are taking major losses as order dates
are back from January and February 2020. Packers are also handicapped and are
not in position to take any new orders until they put some dent in their existing
order book. Indonesia will continue to struggle through late 2020 when their season
starts in Dec. However, they are expected to continue shipping at a steady pace.

Imported White:

We will see a rising market through summer and into fall as shortages continue to
develop with the uptick in demand for both retail and food service. Normal
harvesting has been disrupted as farmers panic harvested in March and April. Many
farmers have reseeded but at 40-50% due to limited raw material. The next harvest
is expected in September with a limited crop availability. Presently there is raw
material available, but the cost is escalating as packers are bidding each other out
in a race to fill their existing orders.

Latin White:

Prices have firmed due to limited supply,

Domestic White & Brown:

The spring season startedmid April to early May but was delayed due to the COVID-
19 impact. Boats are being delayed as overall demand is down and cold storage is
filling up. Retail continues to spike on 16/20 and 21/25 which has driven up pricing
on those sizes across the market. Texas and Louisiana were just hit with a hurricane
which has caused shipping delays. Packers are awaiting to evaluate the damage
after the storm which may cause additional delays.The May/June production of small
peeled was the lowest it has been in over30years, primarily due to lack of shrimping
effort. The next opportunity for small peeled will be this fall with whites.Texas
waters have opened up for shrimping (Mid July).The big boats that have been
working off-shore La and AL have begun to come in with a mix of large white
headless, brown headless, and large head-on for peeling (that would yield 31/35-
61/70 peeled). Boat prices have steadily risen over the last several weeks on all raw
material due to current inventory shortages, and demand from retail and the

gradual opening of foodservice exceeding current supply and production. This is
expected to lastthrough August and into September.

Domestic PUD:

At the moment peeled production is very light on all sizes, and no inventories seem
to exist on 110/130 and smaller. The larger boats have really just gotten back to
work after the storms, and barring any additional tropical disturbances they should
be out for at least 30 days meaning early November. The boats are currently
catching 21/25-41/50 head-on, which yields 36/40-70/90 peeled. As cold fronts
begin to move down from the north the shrimp get smaller, and we typically see
more production of 110/130-150/200 puds from mid Nov through mid Dec.

Domestic Rock & Pink:

Domestic rock production typically starts on the Atlantic coast of Florida toward the
end of July. At the moment there is no concentrated effort on rock, only small
incidental catches of a few rock shrimp along with brown shrimp. It takes a long
time right now to accumulate enough rock raw material to process.Targeted
Domestic rock production typically runs from Late July through December. Mexican
rock production in the southern gulf starts later in the year (typically November)
and runs through the following spring.At the moment there is really no existing
inventory of shell on or P&D rock. It will be late September before wesee some
availability.

Seafood | Lobster

Per Seafood Source:European Union lawmakers have voted in favor of a trade
deal that would see the blocs tariffs on U.S. lobsters removed. The approval came
via a 402 vote by the E.U. parliaments trade committee, and follows up on adeal
struck in Augustbetween U.S. Trade Representative Robert Lighthizer and European
Union Trade Commissioner Phil Hogan. That deal would remove tariffs of 8 to 20
percent on imports of lobsters to the E.U., while the U.S. would half duties on
imports of certain glassware, ceramics, disposable lighters, and prepared meals. In
total, the trade deal covers roughly USD 200 million (EUR 169 million) worth of
goods. The U.S. exported roughly USD 111 million (EUR 94 million) worth of lobster
to the E.U. in 2017. The new deal would apply retroactively to any tariffs paid since

1 August.

North Atlantic:

For N Atl Lobsters the suppliers are having a hard time knowing what will happen
due to Covid. To date the Maine catch has been marginal but there are still the fall
season and time to make up any lack of supply. The tail business has been strong
for the small tails, , 4 and 4/5 tails because the retailers have been very
active.Currentlythere are limited amounts of the larger sizes untilfishing resumes in
late fall in the 6/7 , 8/10 and up range. Most expect the plants to be cautious in
what they pack . If orders are not there they will limitwhat they process to mitigate
losses. Meat costs hadbeen steady but after the holidaythey have taken a
significant rise in cost.The lack of lobster being caught in Maine has
internationalimplications as the evolution of C-19 saw frozen meat/tailinventory
prices collapse in Q-1/20 and Q-2/20 was atransitional learning period for all
involved. It was themiddle of Q-3/20, when the lack of raw material becamean issue
and we saw venture capital take a position andarbitrarily raise the raw mat price by
a buck a pound inwhat could be viewed as attempting to either set or perhaps
corner the market. This flexing of financial musclehas stimulated pricing which
couldrise to winter 2020 levels pre Covid.Social distancing in the plants has made
production of laborintensive products such as leg meat an issue and as a resultthe
lack of L for CKL has limited the volume of this staple blend.The supply/demand
commodity nature of lobster pricinghas lent further credence to firming prices as
witnessed bythe live market. Depending on the sourcethe landings in Maine may be
off as much as40%-60% YOY.and last year was not even close tothe big numbers
posted over the past 15 years. There aremany that hope that the recent New Moon
tides and thepassage of Hurricane Teddy may have stirred up thebottom and
stimulated landings, it remains to be seen.It is not unusual for hard shell lobster
prices to firm moving into the fall months. However, this year, NE hard shell select
market prices have increased 50% since early August. By all accounts, stored hard
shell inventory throughout the industry is low. Uncertain market conditions related
to COVID-19 lockdowns and restrictions have compelled market participants to be
cautious with their holdings. Typically, strong demand for the Chinese Fall Festival
(Oct. 1) fuels buying interest in larger sized selects. Because pounded inventory is
so much lower than a normal year, even a reduced demand is exceeding supply. A
recent slow-down in the Maine catch has resulted in firming prices for firm shell
product. NE firm shell halves prices are trading 15% higher than the 5-year average
and are in line with 2019 prices. Typically, firm shell product makes its way into the

processing sector. At these higher levels, processors have pulled back. Frozen
inventories, due to limited processing during the Canadian spring season, is
reported to be tight...

Warm Water:

The WW tail market as for the N Atl market has decreased in demand for the Food
Service sector. To date we have supply on all sizes . Note a significantly
softercostthan last fall / winter as the marketadjusts to the new normal
Reportsindicate the plants are social distancing to maintain production This year
they seem to mirror the N Atl Market to capture theirshare of the market based on
cost. However... there has been increased demand in the retail sector that has
driven movement. As travel,cruises etc have been limited and the big parksremain
closed or limited , many have chosento use their disposableincome on what in other
years has been pricy product.

Seafood | Crab

The Alaska Dept. of Fish and Game announced the 2020/2021 crab quotas . Mostly
the results confirmed industry expectations, although snow crab increases were
lower than hoped.For red king crab, the precarious nature of the stock has led to a
cut of 1.15 million lbs, which is 30% below the 3.8 million pounds quota set in
2019.The stock has been on a long term decline, and earlier management
strategies would have completely closed the fishery. However, in recent years
ADF&G has revised some of the thresholds, so that a weak recruitment leads to
lower harvest levels, but not a shut down of the entire fishery.With conservative
management, the stock is neither overfished nor subject to overfishing. The
allowable biological catch has declined from 6 million lbs in 2019 to 3.54 million lbs
in 2020, with the TAC set well below this level at 2.648 million lbs.Russian catches
of red king crab are stable, and the loss of 1.15 million pounds in Alaska quota
should continue the trend of high king crab demand and pricing.For snow crab, the
2019 Alaska harvest was 34 million lbs., with a biomass projected at 368 million lbs.
Snow crab recruitment is very strong, and the projection biomass for 2020 was to
grow to 610.2 million lbs, a 66% increase.However, due to the pandemic no crab
trawl surveys were conducted this summer, so the TAC was set based on a
continuation of trends identified in 2019. For this reason, ADF&G was more
conservative increasing the TAC than the projected biomass might call for, with a

32% increase to 45 million lbs. in 2020.There will also be a small Bairdi or tanner
crab fishery this year west of longitude 166 of 2.348 million lbs. Again, there was no
survey, but there has been considerable revisions to the Bairdi crab models in the
last few years, and the current ABC matches that of 2017-18, when the fishery was
last opened.The snow crab announcement is generally looked upon as an important
market indicator for the coming year.This year, snow crab has been one of the top
selling seafood products, so much so that unlike many fisheries which have seen
lower values in the pandemic due to the cutback in foodservice demand, snow crab
is currently oversold, and back up to record price levels.

Snow Crab:

Seafood Source has reported that frozen seafood sales jumped 42 percent, and
volume climbed 34 percent, for the week ending 23 August compared to the same
week last year. (IRI and 210 Analytics)U.S. imports of Canadian snow crab in July
were up 31% to 17.391mm lbs. compare to July, 2019. At thesame time average
import value increased 14% in July . This increase in value indicates major repeat
orders and future support even as the price went up. It's a fact that historically the
U.S. receives about 80% of its total snow crab imports from Canada in May-
July.Total U.S. imports from Canada for the three month period in 2020 were 10mm
lbs. higher than 2019. Product has been limited since mid summer especially on
large size Opilio. Snow crab prices have risen $1.00/lb on 8ozCanadian over the last
month and 4% on 10 up with limited availability. Canadian snow crab prices with
the exception of 5/8oz arenow over 20% compared to the same period in 2019. In
generalall sizes are short and costs continue to climb.

King Crab:

As we move into fallwefind some of the mostimportant king crabfisheries. The
Russian Far East, Barents Sea, and then the Alaska Red king crab seasons. Russia
will be harvestingover 26,000 M/t andsupplying the Asia live market as well as the
processed markets in Japan, Asia, and the U.S. With the closure or curtailment of
most food service operations andon line ordering, seafood marketers this yearhave
been challengedto find other ways to move the product. Not many carryout
restaurants serve king crab or snow crab so retail is the market of choice. The level
of support at retail supermarkets and club stores for king crab and snow crab has
been remarkable. Productflew through thesystem and we found that 69,268,393 lbs
of Canadian snow crab alone was importedduring the three month period of May
through July!King crab volumes of course are much lower but alsogained significant

support from retail. Note the Alaskan Gold Crab season is underway but haveseen
limited offers or productin the lower 48 to date. Fornow costs on all sizes (Reds and
Golds)have been firm and are expected to remain so through the holiday season.

Red Swimming Crab:
Blue Swimming Crab:

Seafood | Scallops

Overall the scallops quota was cut about 15-18% versus last year (approximately 50
million pounds this year versus 59 million pounds caught last year).Landings are
30% lower this year on larger count scallops versus this time last year (10/20 and
larger).Landings of 20/30 scallops are averaging mostly 28/33 (and smaller)
count.While food service demand is lower this year, very high retail demand has
caused boat prices to firm. 2021 Fishing quota is expected to be lower than 2020
which will increase the boat price. The scallop marketwill continue to firm with USA
resources as recent auctionprices are reflecting this trend. There is not much fishing
left in the fleet, many trips being heldfor carry over due to small sizes, low catch
rates, and southern problems with nematodes. Per Undercurrent : During an initial
slow start. due to the widespread closure of restaurantsacrossthe USA and abroad
in the spring , and the fear of a resulting marketweakness, scallops sold for an
averagedock pricebelow that of 2019 . As of the first week of October the average
dock price jumpedby 48% in the four months since then taken froma simple
average the total dollars divided by the poundsharvested and obviously varies by
size and quality. As a result frozeninventoriesgoing into the fall and winter are far
less at the producer level . Expect the prices of the U10 through10-20's to rise
sharply over the next few weeks.

Chinese Flounder and Ocean Perch:

China production plants are still running at reduced volume (70%) as there is still a
lack of demand around the world because of the Covid-19 impact. Pricing will most
likely remain soft into the fall until suppliers have placed orders for the Holidays /
Lent. Once this happen we may face an upward pressure on pricing.

Seafood | Salmon

Imports of frozen Atlantic fillets decreased when compared to the previous month
9.2 percent. However, on a YTD basis, imports are 26.8 percent higher. Imports
from Chile decreased slightly 0.1 percent from the previous month but remains 23.8
percent higher on a YTD basis. Imports from Norway decreased 4.9 percent
compared to the previous month but continues to see an 18.9 percent increase on a
YTD basis. We must mention that we assume this HS code includes frozen
portions.The frozen fillet and portion markets out of Chile were stable again this
month. Pricing levels for both frozen fillets and portions are below the three-year
averages. The market is unsettled; both higher and lower offers are noted; some
discounting of aged product is also noted. In the market to this point, many
participants reported a greater desire to see the fish sell fresh rather than go into
the frozen market, again we will see how this begins to change over the next
several weeks.Retail activity throughout the month of September followed closely to
the 3 and 5 year averages for the number of buying opportunities. When taking a
look at the average retail price, we notice that since about mid-August, pricing has
tracked well below both the 3-and-5-year averages; each week overall average
pricing trending lower. From a YTD perspective, the number of promotions are down
4.6 percent and the average price is 5 percent. Per Undercurrent News:Globally
the picture for Atlantic Salmon shows that volumes have continued to increase in
2020 despitethe coronavirus , with a growth rate of 3.6% globally this year, per
Kontalis' data

Norwegian Salmon:

The Norwegian Salmon industry has been operating during the pandemic, and
although volume is down the pricing affected the large fish (6+ Kg) the most as this
was for Asian markets.The food service industry has been heavily impacted as we
know, but retail business picked up a lot of this volume and as such kept harvesting
and production moving. With a mild winter, less harvesting inearly spring wewould
think that we will see more volume pushed towards late summer and/or fall which
normally will lead to pressure on prices, and more than the usual fall pressure.
Prices are supposed to move up a bit based on FishPool, but we arenot sure this will
be the case as there is a large number of fish still in the water. Sea lice is becoming
a bigger issue with warmer water and faster growth, so that could mean more small

fish being harvested which again can affect future harvesting this fall. But the
biggest question remains the exchange rate into the fall as the USD is getting
weaker and weaker. Note per Undercurrent News : Norwegiansalmon spot prices
are likely to be volatile fromweek to week over the nextmonthor so as harvest
volumes are expected to rise year over year. Many expect the harvest profile for
2021 tobe similar to 2020 with little growth the first half ofthe year with more fish
during the secondhalf. However supply growth next year is supposed to be negative
for Chile during the second half of the year. Smolt released for harvest during the
latter part of 2021isdown 26% y o y with only two more months left in the release
period. Per Undercurrent News: Norwegian growth is expected to pick up next
year, expecting Norway's Atlantic Salmon production volumes to rise by 4.2% in
2021, exceedinga national production of 1.4 million MT.

Chilean Salmon:

As supply has become more available a massive drop in foodservice demand as the
COVID-19 pandemic widens, has prompted mass closings of bars and restaurants
and caused US salmon prices to fall, not rise.While US foodservice demand for
salmon had diminished some, the picture is not all gloomy, as the retail sector has
been booming and has taken up someof the slack. Note however even with the
issues being reported government officials do not feel that this will affect production
inChileas they have been monitoring this closely at the plant level for some time
and this industry is considered to be essential. Per Undercurrent News: Chilean
salmon production is expected to drop by nearly 10% in 2021, according to the
results of the Global Outlook on Aquaculture Leadership survey (GOAL)while other
countries beside the traditional giants , look set to play a more prominent roll in the
sector's growth in the coming years. The data painted a bleak picture for Chilean
salmon production next year with volumes dropping by 9.4% to close to 650,000 MT
in 2021. This comes after 2020's 6.6% volume growth , contributedto a
steepoversupply and resultant price fall. 2020 is actually still a strong year by
volume for the Chileans so that leads to a pretty seriousprice correction for 2021.
Although production growth of 5.7% is then forecast for 2022, this would still mean
that the country is not anticipatingto returnto 2020 production levels until2023 at
the earliest. RecentlyThe frozen fillet and portion markets out of Chile have been
weak throughout the month. Pricing levels for both frozen fillets and portions are
very far below the three-year averages. The market undertone is currently barely
steady to weak with lower offers noted; some discounting of aged product is also
noted. In the market to this point, many participants reported a greater desire to

see the fish sell fresh rather than go into the frozen market, again we will see how
this begins to change over the next several weeks